The paper, “ICC guidance on supply chain responsibility”, is based on the experience of ICC member companies from a broad range of sectors and countries.
As an area of growing importance to business, particularly in sectors where production is largely outsourced – such as clothing and footwear, electronic and food products – supply chain responsibility has become an important element of corporate responsibility and an integral part of supply chain management, since good practice in this area can make a significant contribution to supply chain continuity and long-term efficiency.
A basic principle for all companies is to deal with suppliers who comply with all applicable laws and regulations governing working conditions, occupational health and safety, and environmental protection. However, in many parts of the world, the lack of government will or capacity to enforce social and environmental laws makes it difficult to ensure that good business practices prevail across supply chains. As a result, a growing number of companies and sector associations have taken steps to assist suppliers in complying with their legal obligations.
In the paper, ICC presents various mechanisms that companies can use to constructively influence their suppliers’ social and environmental performance and recommends practical steps to manage supplier relationships in a responsible way. These recommendations stress the importance of the supplier-selection phase, the need for corporate buyers to adapt purchasing practices to their suppliers’ production capabilities, and the value of developing a long-term collaborative approach between companies and their suppliers.
“Supply chain responsibility initiatives can play a significant role in the improvement of social and environmental practices across industries and production chains,” said Erik Belfrage, Chair of the ICC Commission on Business in Society and Senior Vice President of Skandinaviska Enskilda Banken (Sweden), “but these initiatives should only complement and not substitute the primary role of governments in enacting and enforcing appropriate legislation.” In this spirit, the ICC paper seeks to establish a policy framework to define the respective roles of business and government in this area, and encourages companies to adopt a risk-based approach by concentrating efforts where they are most needed and most likely to bring about change.
The ICC Commission on Business in Society, which developed the paper, is ICC’s main working body on corporate responsibility issues, helping to define the role of business in the context of globalization and changing societal expectations.